Intel P4 strategy dented by Rambus ruling

PC industry in Ramboom or Rambust?

An Intel advertising campaign worth over $300 million, bunches of PC manufacturers committed to Intel roadmaps, and giant semiconductor manufacturer companies, all face further turmoil through the year because of arcane arguments about electronics to be decided in a patent case at a court in Richmond, Virginia next month.

Judge Robert E. Payne, in a pre-trial court ruling made last Friday in a case between small intellectual property (IP) company Rambus Inc (ticker: RMBS) and Siemens spin-off Infineon, limited the extent to which the former could argue patents it took out on certain types of dynamic random access memory (DRAM), used in PCs and other devices, were breached.

The case, which was to start tomorrow, was postponed by Payne until April 10th, and will be held in front of a jury.

While Payne's ruling caused the share price of RMBS to nosedive on an already volatile NASDAQ market, closing at $15.80 last Friday, a 52-week low for the firm, the ruling, and the subsequent result of the trial, will have an effect on stock market bellwether Intel, as well as the rest of the PC market.

Intel has committed to using proprietary memory technology called RDRAM as part of a massive campaign to sell its Pentium 4. This memory, while not part of the up-and-coming law case in Virginia, is technology licensed from Rambus Inc.

Rambus is alleging that Infineon, along with other semiconductor memory companies Micron and Hyundai, has breached its patents on synchronous RAM (SDRAM) and double data rate (DDR) memory, a faster version of SDRAM.

Intel's competitors in the microprocessor (CPU) market – that is AMD and Taiwanese firm Via – have said that Rambus memory offers no real technical advantages over DDR memory, is more expensive, and is proprietary. However, Rambus claims it also holds patents on SDRAM and DDR memory technology, and that is the reason for the current flurry of litigation.

If Intel had been the sole player in the x86 CPU marketplace, Rambus technology would have ruled the roost.

Over the past nine months, Rambus has persuaded a number of large semiconductor manufacturers, known in the business as the Dramurai, to agree to license these patents, and therefore pay it royalties. Giants like Samsung, Toshiba, Hitachi and Matsushita have stumped up, often paying back royalties for using DDR or SDRAM memory in their products.

While Intel has been persuaded that it should also, eventually, offer DDR and SDRAM memory, it will do so after it has attempted to establish its Pentium 4 processor in the market using RDRAM, the proprietary Rambus design.

However, some analysts have argued that a complex marketing deal which Intel has with Rambus, was close to developing a situation in the marketplace which would give these two firms too much control over the future of the PC.

The Dramurai, already smarting over the fact that they have to pay Rambus for the privilege of making RDRAM memory, also feared that they would have to pay the same firm to make SDRAM and DDR memory too. Hence the court case.

Many PC manufacturers, behind the scenes, are also fearful of a situation where they are forced, effectively, to follow roadmaps laid down by Intel. For that reason, many, apart from the Dell Corporation, have welcomed AMD's entry into the marketplace, as it means they have a choice of using not only different CPUs but different memory modules too.

The up-and-coming case is, therefore, a landmark one for the entire PC industry.*

The case has been complicated by other trial rulings made by Judge Payne, in particular one which will allow Infineon to present allegations of breaches of US anti-racketeering legislation called the Rico (Racketeering Influenced and Corrupt Organization) law.

The judge made a series of other rulings Friday, which The Register is currently analysing and will follow up during the course of this week.

In a press release issued by Los Altos based Rambus Inc late last Friday, the company said: "Today, the United States District Court for the Eastern District of Virginia issued a pre-trial ruling involving the Infineon case.

"In this ruling, the court interpreted the scope of disputed terms in the four Rambus patents in suit. Based on this interpretation, Rambus maintains its allegation that Infineon has infringed these four patents.

"Rambus is prepared to protect its intellectual property from those who infringe and looks forward to presenting its case to the jury. Intellectual property rights exist not to just protect Rambus and other companies, but to protect innovation. It is Rambus' right and indeed obligation to our shareholders to do all in our power to protect our patented innovations." ®

* We wondered if we were being a little unfair to Intel which has, after all, slightly changed its mind about Rambus after two and a half years of pressure from the PC industry, to give it its due. And SDRAM and DDR have little to do with INTC, even though the Pentium 4 will eventually use them.

An anonymous reader calling himself "MikeA" re-assures us on that score. In true Ramboid flame mode he kicks our butt with this one: "Intel and Rambus in in full production, as is Samsung, NEC, Toshiba putting out 25 million chips per month, and you don't even mention a word about that. AMD sucks and so does DDr. hell tests show it is no faster than Sdram. Why don't you write about that?"